Quote:
Originally Posted by spunkywho
huh? That makes no sense. Banks lend you a certain amount based on a formula. Not based on your individual lifestyle. Just because their formula (which happens to be different from market to market - after all we want to keep selling real estate...) allows you to borrow a shitload of money, doesn't mean you actually can/will/are able to adjust your lifestyle accordingly. On paper, I'd be able to take out a much bigger mortgage than I carry, but *I* know what expenses I have and how much I want to save for retirement, so I truly cannot afford a larger mortgage. I want to say that *I* know better than the mortgage broker eyeing that commission....
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That depends on your definition of 'afford'. In the UK, banks base their mortgage offer based on affordability and to a certain extent, lifestyle. They do not work it out by a simple formula based on your income alone. I take your point that you have to decide how much spare cash you need after bills etc but I sort of took that as read.